Simple English definitions for legal terms
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A lapsed policy is an insurance policy on which the policyholder has failed to make premium payments. This means that the policy is no longer in effect and the policyholder is no longer covered by the insurance. Most insurance policies have a grace period of 30 or 31 days after nonpayment of premiums, but after that time, the policy will lapse.
For example, if John has a life insurance policy but fails to make his premium payments for two months, his policy will lapse and he will no longer be covered by the insurance.